-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RAujFdIXWLKMefZYe69CXYlMKJuLbD3/S6cpxXpe0ZzGi81C3FLXk9yE/9Gn397P CZbx72zszvUEwvmfy/SCLw== 0000950130-99-007168.txt : 19991221 0000950130-99-007168.hdr.sgml : 19991221 ACCESSION NUMBER: 0000950130-99-007168 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19991220 GROUP MEMBERS: WILSHIRE REAL ESTATE INVESTMENT TRUST INC GROUP MEMBERS: WILSHIRE REAL ESTATE PARTNERSHIP, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WILSHIRE FINANCIAL SERVICES GROUP INC CENTRAL INDEX KEY: 0001024321 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE SERVICES [6199] IRS NUMBER: 931223879 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-49579 FILM NUMBER: 99777447 BUSINESS ADDRESS: STREET 1: 1776 SW MADISON STREET CITY: PORTLAND STATE: OR ZIP: 97205 BUSINESS PHONE: 5032235600 MAIL ADDRESS: STREET 1: 776 SW MADISON ST CITY: PROTLAND STATE: OR ZIP: 97205 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: WILSHIRE REAL ESTATE INVESTMENT TRUST INC CENTRAL INDEX KEY: 0001048566 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 911851535 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 1301 S W 17TH STREET CITY: PORTLAND STATE: OR ZIP: 97201 BUSINESS PHONE: 5032235600 MAIL ADDRESS: STREET 1: 1301 S W 17TH STREET CITY: PORTLAND STATE: OR ZIP: 97201 SC 13D/A 1 AMENDMENT #3 TO THE SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D/A Amendment No. 3 (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) Wilshire Financial Services Group Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $0.01 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 971867106 - -------------------------------------------------------------------------------- (CUSIP Number) Wilshire Real Estate Investment Inc. 1310 S.W. 17th Street Portland, Oregon 97201 (503) 721-6500 with a copy to: Daniel E. Titelbaum, Esq. Heller Ehrman White & McAuliffe 333 Bush Steet, San Francisco, California 94104 (415) 772-6000 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 13, 1999 ----------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [_]. (Continued on following pages) (Page 1 of 7 pages) SCHEDULE 13D - ----------------------- --------------------- CUSIP NO. 971867106 PAGE 2 OF 7 PAGES - ----------------------- --------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Wilshire Real Estate Investment Inc. EIN: 52-2081138 - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [X] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS* 4 OO - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Maryland - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF None SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 2,874,791 OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING None PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 2,874,791 - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 2,874,791 - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 14.35% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 CO - ------------------------------------------------------------------------------ *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - ----------------------- --------------------- CUSIP NO. 971867106 PAGE 3 OF 7 PAGES - ----------------------- --------------------- - ------------------------------------------------------------------------------ NAME OF REPORTING PERSON 1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Wilshire Real Estate Partnership, L.P. EIN: 93-1236269 - ------------------------------------------------------------------------------ CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) [X] (b) [_] - ------------------------------------------------------------------------------ SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS* 4 OO - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF None SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 2,874,791 OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING None PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 2,874,791 - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 2,874,791 - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 14.35% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 PN - ------------------------------------------------------------------------------ *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. INTRODUCTION The Reporting Persons herein named hereby file this Amendment No. 3 to the Statement on Schedule 13D filed by the Reporting Persons on June 10, 1999 and amended on June 18, 1999 and June 23, 1999 (the "Statement") in respect of shares of Common Stock Wilshire Financial Services Group Inc. Defined terms not otherwise defined herein have the meanings ascribed thereto in the Statement. Only those Items amended (including the cover pages of this Statement) are reported herein. Item 2. Identity and Background Wilshire Real Estate Investment Trust Inc. has changed its name to "Wilshire Real Estate Investment Inc." ("WREI"). WREI's address has changed to: 1310 S.W. 17th Street Portland, Oregon 97201 Wilshire Real Estate Partnership, L.P. has also changed its address to: 1310 S.W. 17th Street Portland, Oregon 97201 In all other respects the information in Item 2 remains unchanged. Item 4. Purpose of Transaction Item 4 is amended by adding the following paragraphs: On December 13, 1999 WREI and the Issuer, together with Andrew Wiederhorn and Lawrence Mendelsohn, entered into a Settlement Agreement (the "Partial Settlement Agreement") intended to resolve certain issues outstanding between and among WREI, WFSG and certain of their affiliates, including Wiederhorn and Mendelsohn (collectively the "Disputes"). Certain of the Disputes have resulted in litigation between WREI and certain of its affiliates on the one hand and WFSG and certain of its affiliates on the other. The Disputes and related litigation have been previously described by WREI, most recently in Note 2 to the Financial Statements filed with WREI's Quarterly Report on Form 10-Q for the quarter ended September 30, 1999. The Partial Settlement Agreement, among other things, provides for (a) the release by WFSG of certain claims by WFSG for management fees for the quarter ended September 30, 1999 under the purported Management Agreement between affiliates of WFSG and WREI, (b) discharge of certain obligations relating to mortgage-backed securities previously transferred to WREI, (c) repurchase by WREI of all of its capital stock held by WFSG (as well as all options to purchase such stock held by WFSG and any rights to receive dividends in respect of such stock), (d) release by WREI of certain rights to receive reimbursement for employee costs and (e) the surrender by WREI of the 6% PIK Notes made by WFSG in favor of WREI to WFSG. WFSG has issued to WREI a 6-month note in the amount of $275,000 pursuant to the Partial Settlement Agreement. The Partial Settlement Agreement also settles certain claims by WFSG against Wiederhorn and Mendelsohn for personal expenses. The Partial Settlement Agreement, attached as Exhibit 4(4), does not settle all of the Disputes or the litigation. WREI continues to seek resolution of the remaining Disputes, including the litigation. However, there can be no assurance that such efforts will be successful. Item 7. Material to Be Filed as Exhibits Item 7 is amended by adding the following: Exhibit 4(4): Settlement Agreement dated as of December 13, 1999. SIGNATURE After reasonable inquiry and to the best of the undersigned's knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: December 15, 1999 Wilshire Real Estate Investment Inc. By: /s/ Andrew A. Wiederhorn ------------------------- Andrew A. Wiederhorn Title: Chief Executive Officer Wilshire Real Estate Partnership, L.P. By: Wilshire Real Estate Investment Inc. Its: General Partner By: /s/ Andrew A. Wiederhorn ------------------------- Andrew A. Wiederhorn Title: Chief Executive Officer List of Exhibits ---------------- Exhibit No. Description Page - ----------- ----------- ---- 4(4) Settlement Agreement dated as of December 10, 1999 ---- EX-4.(4) 2 SETTLEMENT AGREEMENT DATED DECEMBER 13, 1999 Exhibit 4.(4) SETTLEMENT AGREEMENT -------------------- This Settlement Agreement (this "Agreement") is made as of December 10, 1999 by and between Wilshire Real Estate Investment Inc., a Maryland corporation, on behalf of itself and all of its subsidiaries and affiliates ("WREI"), Andrew A. Wiederhorn, Lawrence A. Mendelsohn, on the one hand, and Wilshire Financial Services Group Inc., a Delaware corporation, on behalf of itself and all of its subsidiaries and affiliates, other than First Bank of Beverly Hills, F.S.B. ("WFSG"), on the other hand. RECITALS -------- A. WFSG, by itself and through its subsidiaries, and WREI, by itself and through its subsidiaries, are and/or have been parties to various agreements (the interpretation, enforceability or validity of some of which are disputed by one or more of the parties to this Agreement), including the following: 1. A Management Agreement (the "Management Agreement") dated as of April 6, 1998 by and between Wilshire Realty Services Corporation ("WRSC"), a WFSG entity, and Wilshire Real Estate Partnership L.P. ("WREP"), a WREI entity (a copy of which is attached hereto as Exhibit 1). 2. A convertible pay-in-kind note (the "Original PIK Note") (a copy of which is attached hereto as Exhibit 2) dated June 10, 1999. The Original PIK Note, all of the subsequently issued notes issued in discharge of the interest obligations thereupon and all accrued but unpaid interest on the Original PIK Note and any of such subsequently issued notes are collectively hereinafter referred to as the "PIK Notes." 3. An Agreement dated October 19, 1999 (a copy of which is attached hereto as Exhibit 3), as supplemented by a letter dated November 29, 1999 (a copy of which is attached hereto as Exhibit 4), providing for the transfer of certain mortgage backed securities from WFSG to WREI. 4. An Agreement dated October 14, 1999 (the "October 14th Agreement") relating to the transfer of employees, leasehold interests and certain assets and a limited waiver of certain nonsolicitation obligations (a copy of which is attached hereto as Exhibit 5). B. WFSG currently holds 992,587 shares of the common stock of WREI, and options to acquire an additional 1,112,500 shares (including options to acquire 35,000 shares held by certain current employees of WFSG) of WREI common stock. C. In February of 1999, WREI made a payment in the amount of 34,000 British Pounds to a WFSG entity in discharge of an obligation which had previously been paid and satisfied by WREI (the "Overpayment"). D. WFSG has asserted certain claims for reimbursement against WREI (the "WREI Reimbursement Claims") and against Messrs. Andrew A. Wiederhorn and Lawrence A. Mendelsohn (the "Wiederhorn and Mendelsohn Reimbursement Claims") which are set forth on Exhibit 6 attached hereto. The claims set forth in such exhibit have been disputed in whole or in part. E. WREI and WFSG intend by this Agreement to eliminate certain interests which each of them has or may have in or against the other, as more fully set forth below in this Agreement. NOW, THEREFORE, the parties agree as follows: 1. WFSG hereby assigns and surrenders to WREI all of the right, title and interest in shares of WREI common stock held as of the date hereof by any WFSG entity, including, but not limited to, 992,587 shares of WREI common stock and options (including those held by current WFSG employees) to acquire 1,112,500 additional shares of WREI common stock. WFSG also hereby assigns any and all rights to any declared but unpaid dividends with respect to such shares. WFSG herewith delivers all stock certificates and other instruments in WFSG's possession evidencing such common stock and options to acquire WREI common stock properly endorsed in blank, together with any instruments heretofore reasonably requested by WREI to evidence the cancellation or to effect the surrender of any options hereinbefore described. 2. WFSG hereby irrevocably releases WREI for any claim WFSG may have to a management fee otherwise payable by WREI under Sections 9(a) and 9(b) of the Management Agreement with respect to management services rendered by WFSG for the benefit of WREI for the quarterly period ended September 30, 1999. Except as otherwise specifically set forth in this Section 2 and Section 6(1) (to the extent necessary to avoid duplicative recovery), this release shall not be deemed to affect or otherwise prejudice either party's position with respect to any other provision, including Section 14, of the Management Agreement. 3. WFSG hereby accepts and acknowledges that the consideration owing to WFSG as a result of the previous performance of its obligations under the agreements attached as Exhibits 3 and 4 is applied against the Original PIK Note as of the date of this Agreement and is discharged in consideration of the performance by WREI of all its obligations pursuant to this Agreement. 4. WREI hereby cancels all of WFSG' s obligations under the PIK Notes and the PIK Notes are hereby and hereafter considered satisfied and paid in full. WREI herewith surrenders to WFSG the original of all such PIK Notes, and each of which has been marked by WREI to have been "paid in full." 5. WREI irrevocably releases WFSG from all liability and any and all further obligations with respect to the Overpayment and the October 14th Agreement. 6. WFSG irrevocably releases (1) WREI from all liability and any and all further obligations with respect to the WREI Reimbursement Claims and (2) Messrs. Andrew Wiederhorn and Lawrence Mendelsohn from all liability and any and all further obligations with respect to the Wiederhorn and Mendelsohn Reimbursement Claims. The aforementioned releases in this Section 6 apply solely with respect to the specific items scheduled on Exhibit 6 attached hereto. 7. WFSG herewith issues to WREI an unsecured promissory note in the principal amount of $275,000, bearing interest at 9% per annum, the entire principal and interest of which are due and payable on June 12, 2000 (a copy of which is attached hereto as Exhibit 7). 8. Each of WFSG and WREI represents and warrants to the other that: (i) it has the necessary corporate power and authority to enter into and perform its obligations under this Agreement; (ii) this Agreement has been duly authorized by and validly executed on behalf of such party; (iii) this Agreement is a valid and binding obligation of such party, enforceable against the same in accordance with its terms; and (iv) such party owns the assets or properties that it is transferring pursuant to the terms of this Agreement free and clear of any and all liens and encumbrances. 9. Each of WFSG and WREI agrees that upon the request of the other party, it shall, at its own expense, do, execute and deliver such further acts and documents as the other party shall reasonably request from time to time for the purpose of assuring and confirming the other party of the rights hereby created or for the performance of the terms of this Agreement. 10. This Agreement shall be governed by the laws of the State of Oregon applicable to contracts performed entirely in that state, without giving effect to the conflicts of law principles thereof. 11. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all of such counterparts shall together constitute but one and the same instrument. 12. The parties hereto recognize that this is a partial settlement and that additional disputes and obligations exist between the parties. Only the disputed claims expressly mentioned are settled and released by the terms of this Agreement. The parties acknowledge that no party admits any liability for any of such settled and released claims. IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as of the date first set forth above. WILSHIRE REAL ESTATE INVESTMENT INC. -------------------------------------------- By: Its: WILSHIRE FINANCIAL SERVICES GROUP INC. -------------------------------------------- By: Its: ANDREW A. WIEDERHORN -------------------------------------------- LAWRENCE A. MENDELSOHN -------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----